| 28-02-07 | ||||||||||||||||
| MURRAY & ROBERTS ROARS AHEAD TO 2010
HIGHLIGHTS
Murray & Roberts has given a clear signal of confidence in its future prospects by declaring a 125% increase in the interim ordinary dividend to 45 cents per share. Headline earnings per share more than doubled for the half-year to 31 December 2006, supported by a stellar performance in its construction & engineering operations “We have built a formidable performance platform to engage the future potential of all our markets.” said Murray & Roberts Group CE Brian Bruce, commenting on the results. “We believe that private and public capital formation in South Africa is set to increase further before stabilising above existing levels over a number of years into the future.” he said, adding “There is high demand for new investments into the power and energy, water and sanitation, transport and communications sectors to meet the socio-economic development agenda for South Africa.” “Our Middle East and global resources-linked markets also show signs of strong growth and sustainable potential.” he added Murray & Roberts is the leading construction and engineering group in South Africa and has initiated a number of programmes to maintain its share of this growing market and secure the leadership, partners, resources and skills needed to meet this expected increase in demand.” Revenue increased by 55% to R8,58 billion, which includes organic growth of R1,85 billion (33%) and a maiden contribution of R1,2 billion from newly acquired Concor which was consolidated from 1 July 2006. Operating profit grew by 86% to R560 million. An improved interim operating margin of 6,5% (2005: 5,4%) reflects strong operational performance and ongoing efficiency improvements, particularly in the construction & engineering and construction materials & services sectors. Capital expenditure increased by 116% to R401 million in the half-year. This is expected to more than double for the full-year with increased demand from Gautrain and the South African mining contracting operations. In its prospects statement for the full year to 30 June 2007, the directors stated that they expect fully diluted headline earnings to grow by between 50% and 70% compared with the comparable period to 30 June 2006, which excluded the Group’s BBBEE transaction expenses. For further information contact: Murray & Roberts Client Service ADDITIONAL INFORMATION Order Book and Market The Gautrain Project was finally secured in September 2006 followed by financial close in January 2007. The Construction & Engineering order book has increased by 53% in the period to R15,4 billion. Subsequent to the half-year end, the Group in joint venture has been confirmed as preferred bidder for both the Cape Town and Polokwane stadiums for the 2010 Soccer World Cup. The UCW Partnership secured participation in the Spoornet Orex system locomotive project in addition to the Coalink system project awarded earlier in the year The South African construction economy continues to offer significant growth potential to the Group’s Construction Materials & Services operations. There is evidence of strong industrial investment on the horizon, with power stations, rolling stock and an aluminium smelter at Coega examples of major public sector driven investment programmes that are still to impact on the market and the Group. These will benefit the Group’s engineering and fabrication operations in the future and consolidate demand for high-value construction services. Middle East markets remain strong, with a number of new major projects under contract negotiation. This is a competitive and demanding market where various Group operations have established strong brand presence based on delivery and service performance. Associate Associate company Clough Limited in Australia delivered a turnaround profit for the half-year. Clough informed shareholders in its interim review that it “expects the second half performance to be similar to that of the first half.” Black Economic Empowerment Murray & Roberts has committed to a development process that will ensure it meets all the objectives required of it to achieve broad-based black economic empowerment (BBBEE) status within its South African listed company and local subsidiary operations. The Group’s ground-breaking BBBEE transaction concluded in December 2005 ensures that the Group has almost 15% empowerment ownership across all its South African operations. This is selectively enhanced through additional empowerment ownership of between 15% and 30% in companies where charter, legislative or market requirements demand. Significant value has accrued in just one year to the community trusts, executives and 14000 employees included in the BBBEE structures. Acquisitions and Disposals The Group underwrote a further recapitalisation of Clough Limited in December 2006 and acquired a further 3% shareholding on the market bringing the Group’s total current shareholding to 49%. On conversion of all existing rights, the Group’s shareholding will increase to 53% within the next financial year. All regulatory hurdles were cleared in January 2007 for the acquisition of 80% of Wade Walker in South Africa. The company is a leading electrical and instrumentation engineering contractor in the SADC region. The Group has disposed of its remaining shareholding in Borbet South Africa in and has reached an advanced stage in the disposal process of the Foundries Group. |
